DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
----------------------------- )       ISCR Case No. 10-08511
)
Applicant for Security Clearance )
Appearances
For Government: Marc G. Laverdiere, Esquire, Department Counsel
For Applicant: Pro se
October 31, 2011
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DECISION
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ROSS, Wilford H., Administrative Judge:
Applicant submitted his Electronic Questionnaire for Investigations Processing
(e-QIP), on July 16, 2010. (Item 5.)  On April 12, 2011, the Defense Office of Hearings
and Appeals (DOHA) issued a Statement of Reasons (SOR) to the Applicant detailing
the security concerns under Guideline F (Financial Considerations).  The action was
taken under Executive Order 10865, Safeguarding Classified Information within Industry
(February 20, 1960), as amended; Department of Defense Directive 5220.6, Defense
Industrial Personnel Security Clearance Review Program (January 2, 1992), as
amended (Directive); and the adjudicative guidelines (AG) effective within the
Department of Defense for SORs issued after September 1, 2006. 
 
Applicant submitted an Answer to the SOR on April 27, 2011, and requested a
decision without a hearing. (Item 4.) Department Counsel submitted a File of Relevant
Material (FORM) to Applicant on May 16, 2011.  Applicant received the FORM on May
24, 2011, and was given 30 days to submit any additional information.  He elected to
submit additional information on June 10, 2011. Department Counsel had no objection
to the additional information, and it is received in evidence as Applicant Exhibit A. The
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case was assigned to me on July 5, 2011.  Based upon a review of the pleadings and
exhibits, eligibility for access to classified information is granted.
Findings of Fact
Applicant is 42, single, and has a bachelor’s degree.  He is employed by a
defense contractor and seeks to obtain a security clearance in connection with his
employment.
Guideline F, Financial Considerations
The Government alleges that Applicant is ineligible for clearance because he is
financially overextended and, therefore, at risk of having to engage in illegal acts to
generate funds. Applicant admits SOR allegations 1.b., 1.d., 1.g., 1.h., and 1.k. He
denied allegations 1.a., 1.c., 1.e., 1.f., 1.i., and 1.j. The admissions are deemed findings
of fact. He also submitted additional information to support his request for a security
clearance.
Applicant’s financial problems came to a head in 2007. At that time, according to
Applicant:
I came to the realization that the financial debt that I had accrued during
my 4 years at college and the years before I was able to secure steady
fulltime employment had become overwhelming and out of my control. I
was keeping up with minimum payments, but was not decreasing my
overall debt. At this point I contacted an attorney for legal/financial
consultation. One option was Chapter 7 bankruptcy, but I did not want to
go in that direction. I felt that I had a responsibility to honor these
commitments even if it was going to be painful and take a long period of
time. (Item 7 at 4.)
Applicant submitted documentary information showing that an attorney began to
represent him with regards to his financial situation in January 2008. (Item 7 at 7-10.)
The SOR alleges, Applicant admits, and credit reports in the record show that
Applicant owed approximately $47,275 in past-due debt. (Government Exhibits 2, 4, 5,
8, 9 and 10.) The amount rises to $92,055 including allegations 1.a., 1.c., 1.e., 1.f., 1.i.,
and 1.j., which Applicant denies or disputes. The current status of the debts in the SOR
is:
1.a. Applicant denied owing this $13,495 credit card debt. However, through his
attorney, he has privately negotiated a payment arrangement with the creditor’s
attorney, and has paid this debt down to approximately $9,506 by making $200 a month
payments from August 2009 through at least June 2011, when the record closed. (Item
7 at 11-12, 16; Applicant Exhibit A at 15-20.)
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1.b. Applicant admitted owing this $78 credit card debt. While Applicant stated
that he would resolve this account, he had not done so as of the time the record closed.
(Item 4.)
1.c. Applicant denied owing this $4,884 credit card debt. However, through his
attorney, he has privately negotiated a payment arrangement with the creditor’s
attorney, and has paid this debt down to approximately $3,854 by making $110 a month
payments from January 2010 through at least June 2011, when the record closed. (Item
4; Applicant Exhibit A at 9-14.)
1.d. Applicant admitted owing this $22,230 credit card debt. He states that his
attorney is working with the creditor to settle the account. (Item 4.)
1.e. Applicant denied owing this $3,156 credit card debt. However, through his
attorney, he has privately negotiated a payment arrangement with the creditor’s
attorney, and has paid this debt down to approximately $1,184 by making $75 a month
payments from May 2009 through at least June 2011, when the record closed. (Item 4;
Item 7 at 14-15, 18; Applicant Exhibit A at 3-8.)
1.f. Applicant denied owing this $8,447 credit card debt. He has consistently
stated he has no knowledge of this debt, and that he is working with his attorney to have
it validated or removed from his credit report. (Item 4, Item 7 at 5.)
1.g.  Applicant admitted owing this $4,844 credit card debt. He states that his
attorney is working with the creditor to settle the account. (Item 4.)
1.h.  Applicant admitted owing this $7,116 credit card debt. He states that his
attorney is working with the creditor to settle the account. (Item 4.)
1.i.  Applicant denied owing this $6,501 credit card debt. However, through his
attorney, he has privately negotiated a payment arrangement with the creditor’s
attorney, and has paid this debt down to approximately $5,926 by making $115 a month
payments from January 2011 through at least June 2011, when the record closed. (Item
4; Item 7 at 13, 17; Applicant Exhibit A at 21-26.)
1.j.  Applicant denied owing this $8,447 credit card debt. He has consistently
stated he has no knowledge of this debt, and that he is working with his attorney to have
it validated or removed from his credit report. (Item 4, Item 7 at 5.)
1.k.  Applicant admitted owing this $13,007 credit card debt. He states that his
attorney is working with the creditor to settle the account. (Item 4.)
Applicant also submitted documentary information showing that he had settled
other past-due accounts that were of interest to the Government, but are not alleged in
the SOR. (Item 7 at 19-21.) Applicant’s current finances are stable. A Financial
Statement dated February 25, 2011, shows that he can make the agreed payments
described above and pay his current debts with his current income. (Item 7 at 24.)
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Policies
Security clearance decisions are not made in a vacuum.  When evaluating an
applicant’s suitability for a security clearance, the administrative judge must consider
the adjudicative guidelines (AG). In addition to brief introductory explanations for each
guideline, the adjudicative guidelines list potentially disqualifying conditions and
mitigating conditions, which are to be used as appropriate in evaluating an applicant’s
eligibility for access to classified information.
These guidelines are not inflexible rules of law. Instead, recognizing the
complexities of human behavior, these guidelines are applied in conjunction with the
factors listed in the adjudicative process. The administrative judge’s over-arching
adjudicative goal is a fair, impartial and commonsense decision. According to AG ¶ 2(c),
the entire process is a conscientious scrutiny of a number of variables known as the
“whole-person concept.” The administrative judge must consider all available, reliable
information about the person, past and present, favorable and unfavorable, in making a
decision.  In addition, the administrative judge may also rely on his or her own common
sense, as well as knowledge of the law, human nature, and the ways of the world, in
making a reasoned decision.
The protection of the national security is the paramount consideration. AG ¶ 2(b)
requires that “[a]ny doubt concerning personnel being considered for access to
classified information will be resolved in favor of national security.” In reaching this
decision, I have drawn only those conclusions that are reasonable, logical and based on
the evidence contained in the record. Likewise, I have avoided drawing inferences
grounded on mere speculation or conjecture.
Under Directive ¶ E3.1.14, the Government must present evidence to establish
controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, the applicant is
responsible for presenting “witnesses and other evidence to rebut, explain, extenuate,
or mitigate facts admitted by applicant or proven by Department Counsel. . . .” The
applicant has the ultimate burden of persuasion as to obtaining a favorable security
decision. 
A person who seeks access to classified information enters into a fiduciary
relationship with the Government predicated upon trust and confidence. This
relationship transcends normal duty hours and endures throughout off-duty hours. The
Government reposes a high degree of trust and confidence in individuals to whom it
grants access to classified information. Security clearance decisions include, by
necessity, consideration of the possible risk that the applicant may deliberately or
inadvertently fail to protect or safeguard classified information. Such decisions entail a
certain degree of legally permissible extrapolation as to potential, rather than actual, risk
of compromise of classified information.
 
Finally, as emphasized in Section 7 of Executive Order 10865, “Any
determination under this order . . . shall be a determination in terms of the national
interest and shall in no sense be a determination as to the loyalty of the applicant
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concerned.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access
to classified or sensitive information).  
Analysis
Guideline F, Financial Considerations
The security concern for Financial Considerations is set out in AG & 18:      
Failure or inability to live within one=s means, satisfy debts, and meet
financial obligations may indicate poor self-control, lack of judgment, or
unwillingness to abide by rules and regulations, all of which can raise
questions about an individual=s reliability, trustworthiness and ability to
protect classified information. An individual who is financially overextended
is at risk of having to engage in illegal acts to generate funds. 
The guideline notes several conditions that could raise security concerns. Under
AG & 19(a), an Ainability or unwillingness to satisfy debts@ is potentially disqualifying.
Similarly under AG & 19(c), Aa history of not meeting financial obligations@ may raise
security concerns. Applicant, by his own admission, and supported by the documentary
evidence, had substantial past-due debts for several years. The evidence is sufficient to
raise these potentially disqualifying conditions.
The guideline also includes examples of conditions that could mitigate security
concerns arising from financial difficulties. Applicant admits that his financial problems
were primarily of his own making. Like many people, he acquired credit easily while in
college and made only the minimum payments on his accounts until the balances grew
to an unmanageable level. Unlike many people, he then obtained legal representation in
January 2008, almost four years ago, to help him resolve his financial issues.
Through his attorney, Applicant has been paying his past-due debts in a
consistent fashion for a considerable period of time that predates by years when the
Government first became concerned about his debts. Under the particular
circumstances of this case, I find that Applicant has “initiated a good-faith effort to repay
overdue creditors or otherwise resolve debts,” as required by AG ¶ 20(d). 
Applicant has not received formal financial counselling. However, as found
above, his  current financial situation is stable. I find that “the person has received or is
receiving counseling for the problem and/or there are clear indications that the problem
is being resolved or is under control,” as required by AG ¶ 20(c).
As stated above, Applicant denies any knowledge of two debts. He states that his
counsel is working to validate the accounts or remove them from his credit report. Given
the fact that he freely admits his other debts, and is represented by counsel, his
statements regarding these debts are credible. Under the facts of this case AG ¶ 20(e)
is applicable, “the individual has a reasonable basis to dispute the legitimacy of the
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past-due debt which is the cause of the problem and provides documented proof to
substantiate the basis of the dispute or provides evidence of actions to resolve the
issue.”
Applicant still has a considerable amount of debt and a long way to go to be debt
free. However, it is important to look behind the debt and see how an Applicant is
responding to that debt. Here, for almost four years, Applicant has been working with an
attorney to pay down his debt in a responsible fashion. As the Appeal Board ruled
concerning the successful mitigation of security concerns arising from financial
considerations, “[a]n applicant is not required to show that [he or] she has completely
paid off [his or] her indebtedness, only that [he or] she has established a reasonable
plan to resolve [his or] her debts and has ‘taken significant actions to implement that
plan.’” ISCR Case No. 06-12930 at 2 (App. Bd. Mar. 17, 2008) (quoting ISCR Case No.
04-09684 at 2-3 (App. Bd. Jul. 6, 2006)). Applicant has done that here.
Whole-Person Concept
Under the whole-person concept, the administrative judge must evaluate an
applicant’s eligibility for a security clearance by considering the totality of the applicant’s
conduct and all the relevant circumstances. Under AG ¶ 2(c), the ultimate determination
of whether to grant eligibility for a security clearance must be an overall commonsense
judgment based upon careful consideration of the guidelines and the whole-person
concept. The administrative judge should consider the nine adjudicative process factors
listed at AG ¶ 2(a): 
(1) the nature, extent, and seriousness of the conduct; (2) the
circumstances surrounding the conduct, to include knowledgeable
participation; (3) the frequency and recency of the conduct; (4) the
individual’s age and maturity at the time of the conduct; (5) the extent to
which participation is voluntary; (6) the presence or absence of
rehabilitation and other permanent behavioral changes; (7) the motivation
for the conduct; (8) the potential for pressure, coercion, exploitation, or
duress; and (9) the likelihood of continuation or recurrence.      
I considered the potentially disqualifying and mitigating conditions in light of all
the relevant facts and circumstances surrounding this case. Applicant had some serious
financial problems, but his current financial condition is stable. Under AG ¶ 2(a)(2), I
have considered the facts of the Applicant’s debt history. He obviously has learned his
lesson about excessive spending and is working hard to resolve his debt situation.
Based on the record, I find that there have been permanent behavioral changes under
AG ¶ 2(a)(6). Accordingly, I find that there is little to no potential for pressure, coercion,
exploitation, or duress (AG ¶ 2(a)(8)); and that there is no likelihood of recurrence (AG ¶
2(a)(9)). 
Overall, the record evidence leaves me with no serious questions or doubts as to
Applicant’s eligibility and suitability for a security clearance. For all these reasons, I
conclude Applicant has mitigated the security concerns arising from his financial
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situation. On balance, I conclude that Applicant has successfully overcome the
Government's case opposing his request for a security clearance.  Accordingly, the
evidence supports granting his request for a security clearance.
Formal Findings
Formal findings for or against Applicant on the allegations set forth in the SOR,
as required by section E3.1.25 of Enclosure 3 of the Directive, are:
Paragraph 1, Guideline F: FOR THE APPLICANT
Subparagraphs 1.a. through 1.k.: For the Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, it is
clearly consistent with the national interest to grant Applicant eligibility for a security
clearance.  Eligibility for access to classified information is granted.
                                              
WILFORD H. ROSS
Administrative Judge